Podcast Summary: How I Invest with David Weisburd
Episode 274: Why LPs Say No Too Late
Date: January 2, 2026
Guests: David Weisburd (Host), Brett (Guest, Glass Funds)
Episode Overview
In this episode, David Weisburd hosts Brett from Glass Funds to explore the evolving landscape of alternative investments, particularly how wealth managers and ultra-high-net-worth individuals are entering the space previously dominated by large institutions. They discuss operational frictions like K1 management, the behavioral obstacles to effective alternative allocation, the nuances of portfolio construction, selecting and underwriting managers, and the paradoxical value of illiquidity in investing.
Key Discussion Points & Insights
1. Glass Funds: Role in the Alternatives Ecosystem
- [00:05–01:14] Glass Funds is an infrastructure platform aiding 150–175 adviser firms in scaling custom alternative investment platforms for high-net-worth clients.
- Offers single electronic subscription docs.
- Aggregated cash flows & tax reporting (e.g., single K1 for multi-fund positions).
- Streamlines operational complexities for advisors and end investors.
2. Solving the K1 Burden
- [01:14–02:43] Glass Funds’ legal structure consolidates K1s, leveraging master evergreen entities.
- Significant for advisors with many clients holding numerous alternative positions.
- Saves on accounting fees and administrative headaches.
- Quote:
- “We think we’ve effectively solved for that … and put it together in a single K1.” – Brett [01:35]
- “If the number of K1s keeps you from investing into the asset class, then it matters a hell lot.” – David [02:43]
3. Model Alternative Portfolios for UHNWIs
- [03:18–06:31] Typical $20mm client allocations:
- 5–8 hedge funds (as a bond substitute).
- Private capital (credit, buyout, growth, venture, real estate).
- Use of “vintage series” for pooled exposure to new funds each year.
- Balances between programmatic (“easy button”) and customizable portfolios.
4. Why Wealth Portfolios Allocate Less to Alternatives Than Endowments
- [06:31–09:39] Institutional portfolios (endowments, pensions) often have 40–50% in alternatives; wealth management is at 10–20%.
- Due to a later start and slower ramp of knowledge/deployment.
- Emphasizes prudent, gradual exposure and educating clients about risk and illiquidity.
- Quote:
- “No wealth manager wants…their first allocations…and then they end up not going well…there’s a desire to start this process in more bite-sized chunks.” – Brett [07:08]
5. The Overuse and Misuse of the Term “Alternatives”
- [10:17–11:44] “Alternatives” is a catch-all masking the wide variety of risk/return and liquidity characteristics within the category.
- Advises investors to think in terms of specific strategy, not the generic term.
6. Smart Portfolio Construction for Individuals Entering Alternatives
- [11:44–14:36] Key principles:
- Multi-year allocation plans (3–4 years suggested).
- Clarity on investor goals and risk tolerances.
- Start with diversified strategies: secondaries, GP stakes, evergreen private credit funds.
- Focus on manager conviction and efficiency of fund wrappers for new entrants.
- Quote:
- “Secondaries can provide instant diversification to hundreds of underlying funds…can be very capital efficient…limited J curve.” – Brett [12:44]
7. Behavioral Alpha and the Importance of Early Wins
- [14:36–15:54] Strategies like secondaries and private credit offer narrower performance spreads and more frequent cash flows, easing behavioral barriers and building trust in the asset class.
- “When an advisor firm is new in the private capital, it’s important to show early wins and to really limit the downside.” – Brett [15:13]
8. Evolution in Secondaries and Private Credit
- [15:54–18:04] Fast-growing secondaries/private credit markets address illiquidity needs; “orphaned” assets in opportunistic debt offer value.
- Glass prefers primaries for direct lending; sees niche opportunities in secondaries for opportunistic debt/mezzanine.
9. Capital Flow Dynamics and Sizing Advantage
- [20:02–22:09] Wealth managers are not capacity-constrained and can access compelling, niche strategies that are out-of-reach for mega-institutions.
- But they often concentrate flows in major managers for perceived safety.
10. Moving Beyond Brand Names to “Capacity-Right” Managers
- [22:09–23:20] Encourages advisors to expand their search beyond household brands over time.
11. Glass Funds’ Framework for GP Selection
- [23:46–27:01] Bottom-up approach:
- Emphasize security selection over beta in hedge funds.
- In private equity, seek value creation through EBITDA/topline, not just multiple expansion.
- Require transparency for fundamental analysis.
- Quote:
- “We favor strategies that create value through EBITDA growth…we discount multiple expansion and leverage.” – Brett [25:55]
12. Evaluating Return Attribution and Skill Versus Luck
- [27:01–28:15] Attribution analysis: Was performance driven by one “lucky” deal or consistent, repeatable skill?
13. Favoring Early Funds Within Established Firms
- [28:30–31:16] Highest focus and potential alpha found in “fund one” situations within established managers’ platforms.
- Quote:
- “…There is a hyper focus on generating high quality returns in a fund one.” – Brett [28:46]
14. Perception vs. Reality of Risk in Alternatives
- [31:53–33:23] There can be a mismatch: First-time funds may be lower risk than “safe” late-stage venture deals.
15. Timeless Advice on Emotional Skills in Investing
- [33:35–35:25] Technical expertise is necessary, but emotional intelligence is often what separates the best investors.
- Quote:
- “Can you handle your emotions to make better decisions?...That’s what the market does: shakes out the weak hands.” – Brett [34:03]
16. The Virtue of Illiquidity
- [35:25–37:19] Sometimes illiquidity benefits investors by preventing impulsive, suboptimal decisions (the “forced diamond hands” effect).
- Quote:
- “There is certainly an advantage in certain asset classes to be illiquid. And that is a hill that I will personally die on.” – David [36:31]
- “For us mere mortals that don’t have that trading prowess, having instant liquidity probably is a bad thing.” – Brett [36:40]
- Quote:
Notable Quotes & Moments
-
On consolidating K1s and removing operational barriers:
“If the number of K1s keeps you from investing into the asset class, then it matters a hell lot.” – David [02:43] -
On initial alternative allocation levels:
“No wealth manager wants…their first allocations…end up not going well. So there’s a desire to start in more bite-sized chunks.” – Brett [07:08] -
On behavioral traps:
“When an advisor firm is new…important to show early wins and to really limit the downside.” – Brett [15:13] -
On evaluating managers:
“We favor strategies that create value through EBITDA growth…we discount multiple expansion and leverage.” – Brett [25:55] -
On illiquidity as a virtue:
“There is certainly an advantage in certain asset classes to be illiquid. And that is a hill that I will personally die on.” – David [36:31] -
On emotional intelligence in investing:
“Can you handle your emotions to make better decisions?...That’s what the market does: shakes out the weak hands.” – Brett [34:03]
Important Segment Timestamps
- [00:05] What is Glass Funds and its role in alternatives
- [01:35] How Glass Funds solves for K1 consolidation
- [03:28] Model portfolios for $20M clients
- [07:08] Why allocations to alternatives differ from endowment models
- [10:22] The overuse of the term “alternatives”
- [11:49] Principles for individual investors entering alternatives
- [15:13] The behavioral impact of early wins
- [16:13] Trends and opportunities in secondary private credit
- [20:02] Why wealth management isn’t capacity constrained
- [23:46] Glass Funds’ criteria for picking GPs
- [28:46] Where Brett likes to allocate: fund one within established managers
- [33:47] Brett’s timeless advice for new investors
- [35:25] The paradoxical virtue of illiquidity
Style and Tone
The conversation is technical, thoughtful, and practical, reflecting both deep domain expertise and a focus on removing barriers for newcomers. Wisdom about behavioral finance, structural market evolution, and investment process underlies the episode's advice.
For anyone navigating the evolving landscape of alternatives, this episode offers both granular tactics and big-picture perspective, mixing operational advice, portfolio strategy, and philosophical reflections on risk and investing behavior.